Iran rial keeps rallying amid reports that sanctions might be eased

A man pays using Iranian rials at a shop, in Tehran on July 31, 2019. (AFP photo)

Iran’s currency rial keeps rallying against the US dollar after reports emerged from a summit of the G7 group of industrial nations that American sanctions on Tehran might take a different course in the future.

The rial was trading at a months-high of 112,500 against the US dollar on Monday afternoon local Iranian time, according to currency rate monitoring websites and local media reports.

That comes a month after the rial began surging against foreign currencies despite rising tensions between the United States and Iran in the Persian Gulf.

The rial plunged from highs of 50,000 against the dollar in early months of 2018 to historic lows of 190,000 in September, just before US President Donald Trump imposed a series of new sanctions on Iran.

The new jump for the rial came a day after Iranian Foreign Minister Mohammad Javad Zarif unexpectedly flew to France to hold talks with senior officials of the country while they were hosting negotiations between G7 leaders, including Trump, on how to find a way out of a the current political standoff with Iran.

Trump hinted during G7 summit that he might have second thoughts about Iran sanctions as he faces the prospect that his policy of maximum pressure might fail permanently.

Trump claimed in May, when he toughened bans on Iran’s sale of oil, that the country would be forced to resume talks on its nuclear program to save its economy from a freefall.

However, reports over the past months have suggested that Iran has managed to weather the harsh impacts of the American sanctions.

The Bloomberg said in a report last week that Iran’s tightened control on currency transfers and its reform plans for various sectors of the economy had already yielded results, adding that businesses and households were adapting to the situation that followed the sanctions.

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